These questions provide general information about plan design. The specific rules for your company’s plan are denoted in the Key Rules which are available from your Human Resources. Or if you want us to send you a copy, you can request it by going to
Request Key Rules.
What are the pre-tax accounts available?
For employers who are also using the Flex Plan (Flexible Spending Accounts):
- Group Healthcare Premiums (medical, dental, eye care, etc.)
- Unreimbursed Healthcare Expenses
- Child/Dependent Care
For employers who are also using the TFA Plan(Transportation Fringe Accounts):
- Mass Transit,
- Parking Expenses.
Back to top
When is the Plan Year?
The Plan Year is determined by each company. While many may choose a calendar year (January 1st through to December 31st), the plan year may start at any time and be any 12 month period. The first plan year can also be a less than 12 months (a short year). The IRS rules indicate that:
- annual elections must be made prior to the start of the plan year. and
- services must be incurred during the Plan Year or the "grace period" - - the date of service is the key, not the date paid. The "grace period" allows a participant to submit claims for services which are up to 2 months and 15 days after the end of the Plan Year.
Back to top
Do I have to get all the paperwork in during the Plan Year?
No, there is a grace period for “extendend processing” usually at least 3 months after the plan year ends to complete the necessary claims paperwork for services during this Plan Year. Anyone needing an additional extension must submit a written request for more time on or before the grace period ends.
Back to top
Who is eligible to participate?
Eligibility is determined by the rules for each company and is usually the same as the eligibility for the group health plan. Generally all full-time employee are eligible.
Back to top
Since pre-tax dollars reduce FICA (Social Security taxes), won't my Social Security payments be affected?
Yes if your gross income less the annual elections is $102,000 or less in 2008 (thus reducing your 7.65% FICA and Medicare contributions). If over $102,000, your 1.45% Medicare contributions will be lower. Since you will be paying less FICA and Medicare today, the government provided benefits may be slightly lower when you retire. For most employees, the impact is not very significant. (If you are still concerned about funding your retirement, then please inquire about other available options as ways to save for retirement.)
Back to top
Does setting aside moneys in the Flex Plan affect any other benefits?
No, the Flex Plan supplements other company provided employee benefits. No other company provided benefits are affected.
Back to top
Do I have to sign up each year?
You must make new elections for the Unreimbursed Healthcare Expenses and Child/Dependent Care accounts during the enrollment period before the beginning of each new Plan Year. For the Healthcare Premiums, Mass Transit, and Parking Expenses accounts you will not have to enroll again. While you can stop or change your election amounts for these options, the current election will automatically be continued from year to year if you do not submit a new election form.
Back to top
If I miss this enrollment when can I enroll again?
Once eligible, if you decline to participate you must wait until the open enrollment period for the next Plan Year unless there is an allowed change of election. Except for the TFA Plan (Mass Transit and Parking Expenses) as there is open enrollment.
Back to top
If I was not eligible at the start of the Plan Year, when can I start?
For the Healthcare Premiums, Mass Transit and Parking Expenses, usually you will be able to enroll when deciding upon the group health insurance as that is when you are first eligible for benefits. For the Unreimbursed Healthcare Expenses and Child/Dependent Care, you will be able to join in the next enrollment period. Each company determines their mid-year enrollment period schedule.
Remember: for the Child/Dependent Care you can start using a Change of Election Form (FormPR6) whenever the program starts or if you switch programs as this is an allowed "change of coverage."
Back to top
When can I change elections?
You will receive a “Confirmation Letter” which will allow you to finalize your annual elections at the beginning of the Plan Year. After the due date to return changes with the Confirmation Letter, you cannot change unless there is an allowed change event.
The IRS rules state that once you make an election, you can only change the Flex Plan Accounts when for either you or a family member there is:
a "significant change of health insurance" (costs or coverages change), or
a "change of family status" (birth, adoption, death, marriage, separation, divorce, etc.),
a “change job status” (terminate or quit, leave of absences, full-time to part-time or vice versa, etc.), or
a “change of residence” when you move to relocate your primary residence, or
a “change of dependent care” either coverage (starting, stopping or switching programs or changing hours) or costs (fees or hourly rates).
The Mass Transit and Parking Expenses can be changed at any time by simply submitting a new Transportation Fringe Account Election Form (TFA PR7.)
Back to top
Can I move money between accounts?
No, moneys cannot be transferred between accounts.
Back to top
Are there any limits to the amounts I can have deducted?
While there are not minimums, there are limits:
- for the Unreimbursed Healthcare Expenses account, your employer can set specific annual limits.
- for the Child/Dependent Care Account the IRS allows a maximum annual deduction of $5,000 per year (if filing separately this may be reduced to $2,500).
- for the Mass Transit account the IRS monthly limit is $115 per month.
- for the Parking Expenses account the IRS monthly limit is $220 per month.
Back to top
What will it cost me to participate?
All costs for set-up and administration are being paid by you employer.
Back to top
What happens if I no longer work here? What if I terminate employment?
Before you leave, the specific options available to you will be fully explained. The only way to take money out of an account is to claim it.
In general, deposits made into your accounts can continue to be claimed during the Plan Year. Terminating or taking leaves of absence will thus only affect the number of payrolls credited not your ability to claim any money credited to your accounts.
Back to top
What if I don’t claim all the money?
The IRS "use it or lose it" rule applies to the Unreimbursed Healthcare and Child/Dependent Care. So amounts not claimed by the "grace period" will be forfeited.
Balances can be carried forward for the Mass Transit and Parking Expenses and are used first before reimbursements are made for your current year.
Back to top
What is the “Use it or Lose it” Rule?
For the Unreimbursed Healthcare and Child/Dependent Care, money set aside but not claimed by year-end will be forfeited -- the IRS "use it or lose it" rule. (While “use it or lose it” applies to Child/Dependent Care, there is little risk to you since you can change your election during the year if costs or programs change.)
Back to top
Can I use the expenses reimbursed in the Flex Plan as itemized deductions or tax credits on my tax return?
No, once you have used expenses in the Flex Plan you may not apply them toward either the itemized deductions or child/dependent care credit.
Back to top
Can I be reimbursed for Child/Dependent Care without providing the social security number (or Federal Tax ID)?
No. IRS rules require that you provide the Federal Tax ID - - for an individual this is the social security number.
Back to top
What about the tax credit for child and dependent care?
Expenses reimbursed from the child/dependent care account cannot also be claimed as a tax credit on your individual tax return (Form 1040, line 41). Please consult your tax advisor as to whether to choose the tax credit or the deduction.
Back to top
How will I know how much is in any of my accounts?
Before we start you will get a confirmation letter showing the proposed payroll deductions. Thereafter, you will get quarterly statements of balances remaining, payroll deposits, disbursements, and claims pending payment. If you want information on a daily basis then call BSI Administrative Services directly or by E-mail.
Back to top
Do I have to wait until there is money in my account?
For the Child/Dependent Care, Mass Transit and Parking Expenses reimbursement is limited to the money credited to-date from your payroll deductions.
Back to top
Are there any limits to the amount I can be reimbursed?
There are no minimums. Your reimbursements for any account during a Plan Year cannot exceed your annual election for that account.
For the Child/Dependent Care, Mass Transit and Parking Expenses accounts, the amount that may be reimbursed is limited to funds credited via payroll deductions into your account(s) to-date less reimbursements. You claim what you spend, any excess amounts will be noted as "pending." Pending amounts will be paid automatically as future deductions are credited into your account(s).
For the Unreimbursed Healthcare Expenses, the amounts will be advanced by your employer up to your annual election less any reimbursements already made. (Thus, the key is amounts paid by you, not amounts deposited).
Back to top
When should I submit my claims? When can I get reimbursed?
You can submit a claim at any time. There are no minimums.
For Child/Dependent Care, Mass Transit and Parking Expenses you should request reimbursement for the amounts you pay, let BSI Administrative Services calculate the pending amounts and allowed reimbursements based on moneys credited from your payroll deposits to-date less amounts already paid.
See also the Instructions for Claims Processing (Form3b).
The Flex Plan (Unreimbursed Healthcare and Child/Dependent Care) claims are paid in sync with you payroll calendar; that is, all properly completed claims received by one payroll date are processed for payment by the next payroll date.
The TFA Plan (Mass Transit and Parking Expenses) claims are processed once a month; all claims received by the 20th of the month are processed for reimbursement with the last payroll of the month (unless the payroll date is on the 21st thru the 25th, in this case, the reimbursement would be on the following payroll date.)
Back to top
Is my information kept confidential?
Any information provided to BSI Administrative Services, whether in writing or orally, will be kept strictly confidential.
Back to top
Who can help me with questions about these plans, my accounts, claims processing, or enrollment?
All inquiries and questions about the Plan can be directed to our independent consultants, BSI Administrative Services (BSI ADMIN). BSI Admin can be reached by phone at (973)300-4274 (4BSI), by FAXing to 973-300-9329 (9FAX), or by E-mail, or by mail at:
Attn: Flex Plan, 93 Spring Street, Suite 202, Newton, NJ 07860.
Back to top
|
